Emotion vs Analytics: What Drives Decision-Making
- How to be decisive and confident in decision making.
- Why starting with price can lead to bad decisions.
- How loss aversion trumps opportunity—and how to counter negative emotions.
Is it best to be emotionless and analytical in decision making? When our goal is to be decisive, the answer is a resounding No. Instead, harnessing the power of emotions is critical. Studies of the neural underpinnings of decision making show that our brains start by evaluating options analytically. But very soon—usually based on first impressions—we create an emotional front-runner. We then continue down a path of predecisional distortion, which biases further evaluation. Rather than creating bad decisions, however, this distortion leads to more confident, committed decision making.
This natural process works best for tradeoff conflicts: deciding between current options. It also works well for decisions involving innovation, growth and expansion. But in cases of sequential conflicts—or when the risk of danger or a bad outcome is greater—taking a more analytical approach is the better choice. Dr. Shiv describes specific techniques for gathering data, group decision making, accessing your gut feelings, and knowing when to allow the contrarians to dominate the discussion.
Baba Shiv, whose research is in the area of neuroeconomics, is Director of the Strategic Marketing Management Executive Program at Stanford University and editor of the Journal of Consumer Research. He received his MBA from the Indian Institute of Management and PhD from Duke University.
Baba Shiv - Professor of Marketing, Stanford University Graduate School of Business
Baba Shiv's research is in the area of consumer decision making and decision neuroscience with specific emphasis on the neurological underpinnings of emotion and motivation in decision making.
In 2001 Professor Shiv was identified by the Marketing Science Institute as one of the future leaders of the next generation of marketing academics. His work on the placebo effects of marketing actions was the runner-up for the Paul Green Award (paper published in the Journal of Marketing Research that shows or demonstrates the most potential to contribute significantly to the practice of marketing research and research in marketing). The work also received a Citation of Excellence from Emerald Management Reviews as the top 50 management articles of 2005. His recent research A Bite to Whet the Reward Appetite" also received a Citation of Excellence from Emerald Management Reviews for 2008. He has received grant funding from the National Science Foundation for his work on the neuroscience of decision making.
Currently the editor of the Journal of Consumer Research he is also on the editorial board of the Journal of Consumer Psychology and the Journal of Marketing Research Professor Shiv has also served as a consultant for several marketing and law firms on issues ranging from branding and pricing to trademark infringement.
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